Senior AHS official spent thousands on high-end restaurants

A senior executive was fired from Alberta Health Services, just hours before CBC was to air a story about how he spent tens of thousands of dollars on lavish meals at high-end restaurants, bottles of wine, even a phone for his Mercedes Benz car.

In a news release on Wednesday, AHS confirmed that the departure of Allaudin Merali, the health board's executive vice-president and chief financial officer, is related to a freedom of information request from CBC News about his expense claims from January 2005 to August 2008.

Chris Mazurkewich, who is the acting CEO of AHS while Dr. Chris Eagle is on vacation, said the decision was made after reviewing the documents with Merali.

"We agreed that under the circumstances it would be difficult to fulfill his current role of CFO," Mazurkewich said. "He did have an employment contract and the employment contract has been terminated."

AHS has posted all the documents, with 146 claims totalling $346,208, on its website.

The documents obtained by CBC show Merali often dined out, at public expense, two or three times a week at such restaurants as Jack’s Grill, Normand’s, The Hardware Grill, Ruth’s Chris Steakhouse, and La Spiga, where on April 25, 2005, he picked up a tab for $1,598.54.

There is often no explanation for the expenses other than "dinner meeting."

AHS policies more stringent, health minister says

The documents detail Merali’s expense claims when he served as chief financial officer for Capital Health.

All his expenses were personally approved by then Capital Health chief executive officer Sheila Weatherill, who now serves on the AHS board. Until his abrupt departure Wednesday, Merali was the chief financial officer of AHS.

The documents also show that on March 30, 2005, Merali picked up the $220 tab at Jack’s Grill for himself and health policy bureaucrat Fred Horne, who is now Alberta’s health minister.

Horne did not respond to interview requests today but issued a written statement in advance of a news conference scheduled for Thursday morning.

"I am concerned, and I understand why Albertans would be concerned, about these expense claims," Horne said. "While travel and hosting expenses can be part of regular business, institutions such as AHS are funded by taxpayers' dollars and, as such, taxpayers rightly expect accountability.

"I am satisfied with the action that has been taken today, and I support the decision by AHS to ask the auditor general to validate their current processes and their commitment to make public all future expense claims of executive officials."

"I have been assured by AHS that policies and processes that are in place today are far more stringent than what was in place under the former Capital Health Authority."

Claimed expenses for his luxury car

On April 17, 2008, Merali spent $1,839.10 at Edmonton’s private Mayfair Golf Club but AHS does not have a receipt for the expense and can’t explain what the payment was for.

Merali also claimed nearly $1,750 for a repair to his 500 series Mercedes Benz and more than $2,000 to have a phone installed in the luxury vehicle.

After Merali left Capital Health in 2009, he made headlines in Ontario for claiming such items as a $1.39 muffin and a $1.59 pop while being paid $2,700 a day as a consultant to EHealth Ontario, the agency which is to implement the province’s electronic health records system by 2015.

Merali made dozens of similar claims while working for Capital Health, including tea and a muffin, and minor parking fees, despite being paid a salary of, at one point, $487,000 a year.

NDP Leader Brian Mason called the expenses extravagant.

"They do seem pretty rich to me and I think people who are working for the taxpayer have an obligation to be, if not frugal, at least reasonable and careful with their expenditures," he said.

Wildrose critic Shane Saskiw said the case raises questions about the government's ability to manage public money.

"It shows that there must not be any internal controls," he said. "Who is reviewing these documents? Someone has to be reviewing documents and expense claims to ensure that they're actually valid expense claims and they're acting in the best interest of the taxpayers."

History of controversy

Merali made headlines in 2007 when it was publicly revealed that, as Capital Health’s chief financial officer, he had overstated the authority’s liabilities in its audited statements two years in a row.

Organizations sometimes overstate their future costs to reduce or eliminate surpluses to increase their chances of getting at least the same amount of funding, or more funding, from the government.

Auditor General Fred Dunn warned Capital Health twice to stop overstating its liabilities and pointed out that Merali, who had previously worked for the auditor general for 16 years, should have known he was not following accepted auditing standards.

Dunn also accused Capital Health of engaging in a practice known as "window dressing," in which an organization conducts artificial transactions that will later be reversed to temporarily improve its financial position as reported in its audited statements.

Dunn levelled that accusation after his auditors discovered that Capital Health had repaid a $27 million loan the same year it borrowed it, even though it cost Capital Health nearly $900,000.

At that time, Weatherill defended Capital Health’s auditing practices but it subsequently stopped overstating its liabilities.